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The company saw net profits rise to $2.17 billion (U.S.) from $1.96 billion in the first quarter of 2006, beating analysts' forecasts for $1.8 billion. Sales rose 18 per cent to $9.82 billion.

Novartis chairman and chief executive Daniel Vasella said he was confident 2007 would be "another year of record sales and earnings.''

Vasella said the company had completed a series of divestments from non-core businesses as part of a long-term strategy to focus on health care. Earlier this month Novartis sold Gerber Products Co. to food giant Nestle SA for $5.5 billion.

Novartis shares rose 0.4 per cent to close at 69.80 Swiss francs, or $64.84 (Canadian), in Zurich.

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Sales of hypertension drug Diovan rose 23 per cent to $1.15 billion (U.S.), sales of leukemia drug Gleevec – known as Glivec in Europe – increased 21 per cent to $674 million and revenue from breast cancer treatment Femara was up 37 per cent to $208 million.

In March, Novartis revised its sales outlook for 2007 after withdrawing its constipation drug Zelnorm in the United States following a request by the U.S. Food and Drug Administration. The company said the move would reduce net sales by $600 million this year.

Basel-based Novartis suffered a further setback in February when the FDA delayed approval of a potential blockbuster drug, diabetes treatment Galvus, and requested further data. But its outlook was boosted in March when the regulator approved Tekturna, a hypertension drug shown to be more effectively than common treatments.

Sales of Novartis' best-selling drugs came in higher than expected, while the costs associated with the withdrawal of Zelnorm were less than what analysts had predicted.

"That's a very good start to the year," said Karl-Heinz Koch, an analyst at private bank Vontobel. "It's unlikely that they will maintain this growth for the rest of the year, given that some drugs are facing generic competition, and that there won't be any contribution from Zelnorm, which would have contributed around $600 million to sales."

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